Let me take you back to the 1930s—a time of flappers, the Great Depression, and investors running around like chickens with their heads cut off trying to "outsmart" the market. In the midst of all this chaos, an oddball of a fund was born. Meet the Voya Corporate Leaders Trust Fund (LEXCX), a fund so passive it made even the laziest investor look hyperactive.
The Birth of an Unconventional Idea
The year was 1935, and most mutual funds operated like caffeine-fueled stock traders—buying, selling, and reshuffling portfolios to chase market-beating returns. But the founders of LEXCX had a different idea. Instead of playing the stock-picking game, they bought 30 blue-chip companies and vowed to do absolutely nothing.
Yup, you read that right. No tinkering, no second-guessing, no chasing hot trends. They’d sell a stock only if the company cut its dividend or went bankrupt. It was like the “set it and forget it” of investing decades before anyone had heard of index funds.
This strategy wasn’t just radical—it was practically blasphemous. Imagine telling Wall Street hotshots in the 1930s that the best way to invest was to sit back and do nothing. It was a bold move, and spoiler alert: it worked.
A Lesson in Patience
Fast forward to 2021, and LEXCX still exists. Of the original 30 companies, only 20 remain in the portfolio. You’d think such a passive approach would underperform, right? Wrong. LEXCX has consistently beaten the S&P 500.
Here’s the kicker: If you’d invested $10,000 in 1941, your investment would have grown to a jaw-dropping $26 million by the end of 2020. On top of that, you’d be raking in $505,000 annually in dividends.
Why Does This Work?
Warren Buffett famously said, “Lethargy bordering on sloth remains the cornerstone of our investment style.” But even Buffett might blush at how passive LEXCX is. So, what’s the secret sauce?
1. Avoiding the Pitfalls of Overactivity
Every time you trade, you pay taxes and fees. Worse, you risk selling a great company for one that doesn’t perform as well. LEXCX sidesteps this entirely by sticking to its original picks, letting compounding and time do the heavy lifting.
2. The Power of Blue-Chip Stocks
The original 30 companies in LEXCX’s portfolio were blue-chip businesses—industry leaders with strong financials. Even after bankruptcies and dividend cuts whittled the list down to 20, the survivors (think ExxonMobil and Procter & Gamble) more than pulled their weight.
3. Compounding Dividends
By holding stocks long-term, LEXCX benefited from compounding dividends. Many of these companies consistently raised their payouts, creating a snowball effect that turned modest initial investments into millions.
What Can We Learn From LEXCX?
If there’s one thing this fund proves, it’s that doing less often gets you more. In a world obsessed with “breaking news” and hot stock tips, LEXCX’s hands-off approach is a breath of fresh air.
1. Investing Doesn’t Have to Be Complicated
Buy great companies. Hold them. Reinvest the dividends. Repeat. It’s not flashy, but it works.
2. Don’t Let Financial Media Distract You
The financial news industry thrives on creating urgency—“Buy this!” “Sell that!” But as LEXCX shows, you don’t need to constantly fiddle with your portfolio to succeed.
3. Time Is Your Best Friend
Great businesses remain great for decades. Instead of trying to time the market, focus on giving your investments enough time to grow.
The Takeaway
The Voya Corporate Leaders Trust Fund was a revolutionary idea in 1935, and its success is a testament to the power of patience and simplicity. While most investors waste time and money chasing the next big thing, LEXCX quietly builds wealth by sticking to the basics.
Want to build a portfolio that stands the test of time? Here’s the recipe:
Invest in high-quality dividend-paying stocks.
Think long-term.
Resist the urge to trade frequently.
Remember, investing isn’t about being the smartest person in the room—it’s about staying the course. Just ask LEXCX. After nearly 90 years, it’s still proving the doubters wrong.